Today, investors will get the latest report on the U.S. trade deficit. It’s expected to show an increase amid still ongoing shutdowns and a lull in factory activity in some states.
In August, there was an increase of 3.5% in the deficit to $89.9 billion.
The Democratic Presidential nominee, Joe Biden, has attempted to hit President Trump for failing to deliver on promises to stop China from “eating our lunch” by sighting deficit numbers as he did in last week’s Presidential debate.
However, the good news for the President is that Biden is incorrect. Though we have seen an increase in the trade deficit overall in recent months, our deficit with China — the gap between what America exports to China and what it imports — fell sharply between 2018 and 2019.
So far this year, the trade deficit in goods with China is running below last year’s levels, as the United States imports fewer products.
Nonetheless, while Mr. Trump has lowered the trade deficit with China, deficits with other countries have grown and the overall trade deficit is once again trending up.
American consumers have shifted to buying more goods from countries like Vietnam and Mexico, given the lesser tariffs implemented on these region’s goods relative to China.